"Whether you want to sell a property, buy real estate, get a home loan, invest in real estate, or rent, you will need a contract. In fact, in real estate nothing is actually accomplished until a contract is signed. You may have agreed to rent a home at a specific price or you may have agreed to buy a property on certain terms, but those verbal agreements mean very little without a signed contract. In fact, a good rule of thumb in real estate is nothing is certain until it is in writing.

Most real estate contracts contain a legal description of the property in question and the street address. Most contain information about the selling price and any mortgage contingency. This means that most real estate contracts are subject to the seller obtaining a mortgage and contain the specifics amount, rate and terms of the loan. Most contracts state that the loan application must be made within a specific number of days. Most contracts also state how much money is being handed over for a deposit and who will hold it. In most cases, the contracts will state the details of the closing, what is and is not included in the sale of the property, any warranties that are included with the property, when the buyers will take possession of the house, how long sellers have to respond to the offer, and provisions about disputes. Generally, contracts will also specify whose insurance covers the property until the closing dates and will outline any disclosures about the property.

Most real estate contracts have certain contingency provisions. For example, most will state that a home inspection is to be done within a specific number of days. Many contracts will state that septic tanks and wells must be tested and pass. Many contracts also state that termite and pest inspection must be carried out and specify who will pay for any pest damage. It is important to pay attention to any such contingencies in a real estate contract since they can make or break a contract. These clauses protect both the buyer and the seller from disputes."

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Article Source: ArticlesBase.com - Contracts in Real Estate